The New York Power Authority will conduct a public hearing on proposed new contracts with three upstate investor-owned utilities as the first step in distributing the authority's economical hydropower throughout the state.

The hearing will be held in Albany on March 25 at the Albany Hilton Hotel.At stake is the continued allocation of up to 960,000 kilowatts of Power Authority hydropower to the three utilities for resale to residential and farm customers.

The utilities, Niagara Mohawk Power Corp., Syracuse; New York State Electric & Gas Corp., Binghamton; and Rochester Gas & Electric Corp., Rochester, now receive 600,000 kw of firm power and 384,000 kw of firm peaking power from the authority's Niagara Project in Lewiston. The contracts, in force since the project began operation Feb. 10, 1961, expire Jan. 1, 1990.

The proposed contracts would extend until the expiration of the Power Authority's license for the Niagara Project in 2007.

The contracts now in force call for allocation of up to 600,000 kw of firm power and up to 360,000 kw of firm peaking power to the three utilities.